After Your Grandmother Retired,she Purchased an Annuity Contract for $250,000

question 19

Multiple Choice

After your grandmother retired,she purchased an annuity contract for $250,000 that will pay her $25,000 at the end of every year until she dies.The appropriate interest rate for this annuity is 8%.The number of years that your grandmother must live in order to get more value out of the annuity than the purchase price is closest to:

• A)21.
• B)16.
• C)8.
• D)10.

---

Definitions:

International Bond

An international bond is a debt investment that is issued in a country by a non-domestic entity, which can be denominated in the issuing country's currency or another currency.

Samurai Bonds

Samurai bonds are yen-denominated bonds issued in Tokyo by foreign governments and organizations, offering investors the opportunity to invest in foreign entities while mitigating currency risk.

Yankee Bonds

Bonds issued in the United States by foreign governments or corporations and denominated in U.S. dollars.

Bulldog Bonds

Bonds issued in the United Kingdom by foreign entities in sterling, allowing those entities to raise capital from UK investors.